For this instalment of the history of legal aid I have again drawn heavily from the writing of Steve Hynes, the Director of the Legal Action Group, on this occasion mainly from Austerity Justice (Legal Action Group, 2012).
I have also studied most of the material mentioned in the endnotes.
The History of Legal Aid (2005-2010)
Total Expenditure on all forms of legal assistance
The Legal Services Commission (LSC)’s net expenditure (£ million) on criminal legal aid and civil legal aid (in all its forms) in the five years of this Fifth Period is shown in the following table (which also includes the equivalent figures for 2000-1):
|Criminal Defence Service||Crown Court & higher courts representation||Total|
|Legal Help||Civil Representation||Total||Overall Total|
 Including immigration proceedings.
The tables show that, broadly speaking, total expenditure during this Fifth Period was kept more or less within the Treasury-imposed cap of £2.1 billion. This was not adjusted for the incidence of inflation, and because there were always pressures which would have meant a steady increase in costs unless remedial action was taken on a continuing basis, the history of these years is one in which the efforts of both the LSC and its sponsoring department were dominated by the need to find different kinds of cost-cutting devices.
Some savings were achieved by killing off the LSC’s local planning structures in 2005-6. During that period it consolidated power into a Central London bureaucracy. As a result, it was easier for it to disengage from suppliers’ interests and to pursue a strategy of becoming a procurement agency rather than the administrator of the legal aid system. The two chief executives, Clare Dodgson (2003-2006) and Carolyn Regan (2006-2010) were both very experienced managers, but neither had had Steve Orchard’s long experience within the courts before taking on the job, and it has been suggested that they did not attract the trust of the legal profession in the way their predecessor had.
The LSC would now take a more centralist role in controlling how advice was provided and by whom it should be provided. Crispin Passmore (a former manager of a law centre) was appointed the first director of the Community Legal Service.
Eligibility and Coverage
Eligibility for civil legal aid:
There was a small increase in eligibility in 2008-9.
The increase in average earnings was faster than the rate of inflation. There were also demographic changes relating to the age and partnership status of the population, the introduction of working tax credits and child tax credits, and reforms to civil legal aid. The reduction in eligibility was not due to a reduction in passported benefits.
Some more statistics
This table shows the reported incidence of problem types in 2000-1 and 2007-8 and the great expansion of legal help for social welfare law:
As more solicitors in private practice abandoned legal aid work, between 2002 and 2008 there was a very marked shift in the proportion of legal help and social welfare law (SWL) advice that was provided by not for profit providers (nfps). In 2002 the LSC had been set a target of providing £20 million of contracted work through nfps. In 2007-8 the equivalent figure was more than £80 million: 31% of annual legal help expenditure, and 67% of provision of SWL advice. However, although the LSC would have liked to see more providers being able to offer the full range of SWL services, in 2006 only six legal aid providers in England and Wales delivered services in all five SWL categories. No law centre had that degree of coverage, and only half the 470 CABx undertook specialist legal advice at all.
By the end of 2008 legal aid had no local dimension to the planning of services and the LSC did not indulge in any consultation with the public over their expectations. This had been possible when the regional planning committees and Community Legal Service Partnerships existed, when firms and nfp agencies had had forums in which their views could be expressed.
In 2007-08 250,877 members of the public were helped by the Community Legal Advice helpline. [The first 15 minutes are provided non-means tested by a generalist adviser].
As at 31 March 2010 the LSC held 2,390 civil and 1,697 criminal contracts with legal aid providers. This table shows the breakdown, and also the number of offices involved.
|Contract type||Number of providers||Number of offices|
|Civil – solicitor||2,058||2,802|
|Civil – nfp||332||404|
In 2009-10 the LSC delivered 1.43 million acts of assistance through the Community Legal Service and 1.17 million Legal Help acts of assistance via face-to-face and telephone advice.
CLACs and CLANs
The Fourth Period had seen the rise and fall of legal service partnerships. This period witnessed the rise and fall of CLACs and CLANs.
A paper published by the Department of Constitutional Affairs (DCA) in August 2005 set out to address the issue of co-ordinating services more effectively, so that they would be better able to address the clusters of problems which clients faced. In other words, the public needed co-ordinated advice, ideally a one-stop shop to avoid them being passed from pillar to post and get lost in the system.
The DCAs proposed solution included the issuing of joint tenders with local authorities for social welfare and family law services: Community Legal Advice Centres (CLACs). The concept of “problem clusters” drew on a Legal Services Research Centre paper “Causes of Action”, of which an updated version had been republished (following a second survey) by the time the LSC published its policy proposals in March 2006. Because the problems they were addressing are remarkably similar to those that still exist (and are now better understood) today, it is worth setting out the problems and the proposed solution.
The LSC identified the problems in these terms:
- Over 40% of people who have problems do not seek advice;
- 1 in 7 of those who seek advice fail to get it, mainly because the adviser can’t help;
- The more a person gets referred on, the less likely they are to get advice;
- Civil justice problems lead to other problems;
- The estimated cost of civil justice problems reported in the 2004 survey for individuals and public services is £13 billion;
- g. 16% of civil justice problems lead to physical ill-health and 27% to stress-related illness;
- People who are socially excluded have multiple problems.
“Causes of Action” they said, provided evidence of the need for:
- visible advice services;
- accessible advice services;
- services which can deal with clusters of problems;
- services which minimise the need for referrals;
- effective referrals;
- legal education so that people understand that problems can be resolved; and
- effective self-help material to support those able to act for themselves.
The LSC’s new strategy advocated a new approach to the way in which civil legal and advice services were funded, purchased and delivered. They had a vision of services which were:
- client-focused and accessible;
- independent; cost-effective and co-ordinated; and
The creation of CLACs and CLANs was one of the main proposals in the new strategy. A CLAC would:
- provide free, independent, face-to-face legal advice services to tackle civil justice issues at the earliest opportunity;
- take strategic action to solve the causes of common problems and play a role in educating people about their legal rights;
- target those with the greatest ned for legal advice services, including those who did not get help from current services;
- be jointly funded by the LSC and the local authority; and
- be a single legal entity.
In contrast, a Community Legal Advice Network (CLAN) would cover a larger geographical area with a less dense population than a CLAC. It was envisaged that CLANs would deliver outreach into community centres, GP surgeries or schools; provide services in locally important languages; and reduce, where possible, the need for clients to travel.
CLACs were most likely to be in urban areas – local authority areas with more than 50,000 benefits claimants. These were likely to be high on the Index of Multiple Deprivation and contain a Neighbourhood Renewal area or Communities First area.
Leicester and Gateshead would be the first two centres to be commissioned. The LSC’s initial analysis in March 2006 suggested that England and Wales could be covered by up to 75 CLACs and 36 CLANs, although this would depend on local factors, including the view of the local authority.
In brief, the LSC was seeking to establish “jointly funded, face-to-face legal and advice services to specialise in social welfare law and to combine disparate services in a one-stop shop.” There was to be a move from private practice to the not for profit (nfp) sector. As part of New Labour’s attack on social exclusion, the LSC wanted CLACs to provide multiple services under one roof to tackle the difficulties faced by those with multiple and cluster problems.
Crispin Passmore said that the LSC would expect a 3-year commitment to funding before going into partnership with a local authority to form a CLAC. It was for a local authority to decide how much it wanted to fund advice.
The role of local authority funding within a CLAC, however, was not defined. It was expected to cover generalist advice service, specialist services for ineligible clients, and services that were out of scope (notably tribunal presentation). There were no identifiable minimum standards. The specifications for the first five CLACs revealed considerable variation.
As to the history, a CLAC was established in Gateshead in May 2007. CLACs at Leicester, Derby and Portsmouth followed a year later, with a CLAC being opened in Hull in October 2008. The first CLAN was established in the East Riding of Yorkshire in March 2010, and a new CLAC, in Barking & Dagenham, followed shortly afterwards. That was all.
Although the LSC had been conducting active discussions with local authorities to establish six more CLACs and four more CLANS in 2010, in the end only one more CLAC and one CLAN was ever established. The big constraint on their roll-out lay in local authorities’ unwillingness to fund legal services. In 2007 local authorities provided £66 million (46%) of funding for CABx, and the LSC provided £30 million (20%). They had different aims. An adequate tender specification was never successfully devised.
Critics said that the project seemed to be compromised by a crude and divisive tendering process with little respect for the providers. The trouble was that once again the LSC lacked the political clout to force local government to share its vision or funding for local advice by pooling resources with the LSC for holistic advice and assistance provision. In addition, the problems of replacing 5,000 traditional firms with up to 50 large-scale providers proved insurmountable.
The Hull tender showed how controversial and radical these proposals could be. It was won by an out of town bid from A4E and a Sheffield law firm. The LSC and Hull County Council would jointly provide £3.5 million. The Hull CAB was shut out, even though it was one of the largest in the Citizens Advice network. It might survive, but some people claimed that Leicester Law Centre had been forced to close after funding cuts because of the CLAC.
There would probably never have been more than a limited number of CLACs, because of the local authorities’ reluctance to enter into joint funding. In a study he conducted in 2010 Professor Richard Moorhead found that CLACs and CLANs also ran up against the intransigencies and entrenched positions of local organisations.
Because of the Treasury’s insistence that the legal aid budget must be effectively capped, the history of these years shows a whole series of policy stop-start initiatives in which the LSC was purporting to continue to prize the quality of the services provided through LSC funding while being constrained by its parent department to attempt different methods of reducing their cost.
One of the successes of the LSC’s initial range of policies was the specialist support services they funded, whereby frontline providers could access free advice, support, mentoring and low cost training in order to help them maintain a high quality standard of services. As late as April 2005 it issued a statement to the effect that thee services had proved invaluable, and a new three-year contract was being negotiated.
Later that year, however, providers were told that their new contracts would not be signed, and in January 2006 that their existing contracts would be terminated because the service no longer fitted into the LSC’s current priorities, and the money would be better spent in providing services direct to the public, shorn of this expert back-up assistance.
This change of policy was strongly criticised by the Constitutional Affairs Committee of the House of Commons two months later, and the High Court made an interim order extending the scheme until December. The LSC said it would reassess its decision and it withdrew the notices of termination, acknowledging the damage this episode had caused in its relationship with practitioners.
Best Value Tendering (BVT)
The LSC used this tendering system, which was in widespread use with public bodies, when it awarded new civil contracts in 2004. The BVT system takes into account factors other than mere pricing, such as the quality of a firm’s IT, training, supervision and so on. It regarded BVT as a “tried and tested method.”
Price Competitive Testing (PCT)
In 2005, however, the LSC proposed a pilot project in London which would involve PCT for criminal defence services. It claimed that this form of tendering would improve quality as well as saving money, but in fact 95% of all existing suppliers were accepted onto the panel who were invited to bid. The only factor that would then be considered would be the price they offered. The LSC said: “No other factors will be considered at this stage as all suppliers will have passed the quality threshold.” This proposal encountered such a hostile reception from practitioners that it was postponed following the announcement of a review of legal aid procurement which Lord Carter was invited to carry out.
In 2004 Clare Dodgson, the new chief executive of the LSC wished to cut down the bureaucratic burdens on suppliers. The LSC dropped its commitment to non-specialist quality marks. They were costly to audit, and considered not relevant to core LSC business. The LSC now set the level for entering the system at “threshold competence”: the lowest level. This was a risk to quality, especially with the introduction of fixed fees.
During that year there were pilot projects in preferred supplier arrangements, on the basis that they would be replaced in due course by peer review. Ideally, the LSC wanted responsibility for quality and accreditation to pass to the Law Society. This would introduce a very welcome reduction in bureaucracy and an increase in the contracting firms’ autonomy. After a successful pilot the LSC issued a consultation paper in 2006 in which it proposed that it would contract only with preferred suppliers by 2009. However, it soon abandoned this idea in the wake of the Carter Review, although in an announcement on its website it insisted that key elements of the scheme would be incorporated in other reforms.
In 2005 LSC proposed Independent Peer Review as the best way to measure the quality of their providers, and they followed up this proposal by announcing it would introduce an independent system that had been developed by Professor Avrom Sherr, of the Institute of Advanced Legal Studies. The Institute would operate the system, train the reviewers and deal with consistency issues. The LSC’s sole role would be to administer the scheme. This development was welcomed by practitioners, who had been concerned that the LSC’s previous methods had not addressed questions of quality directly.
All this yo-yoing on policy initiatives was very divisive internally.
Lord Carter’s Review
Prior to Lord Carter’s report, senior people within the LSC had decided that the deployment of competitive tendering for criminal services was the solution to the control of costs. As has been mentioned already, a planned pilot project for the London area was fiercely opposed. This was when Lord Falconer appointed Lord Carter to carry out a review. “We had to break the hold of the criminal practitioners and force them to restructure so that we could get more control over the costs of provision”. His main policy concerns were the 37% increase in criminal legal aid expenditure since 1997, and the 24% decrease in civil legal aid expenditure (except asylum).
Against this background Lord Carter was invited to review how new models of procurement could be implemented to deliver enhanced value for money and a sustainable supply for legal aid. He was asked to produce a plan by early 2006 describing what action the Government would need to take to enable the legal professions to adapt successfully to new procurement methods.
The Carter Report (2006)
- Redrawing the duty solicitor schemes into larger boundaries and introducing block contracts for police station work;
- Fixed fees for police station work;
- A graduated fees scheme for magistrates’ court work;
- A reform of the fees paid in Crown Court cases;
- Panels to bid for high cost cases on a Best Value Tendering (BVT) basis;
- A spending cut of 20% on Crown Court cases, and a rebalancing of work away from the senior to the junior Bar.
- Fixed or graduated fees for all work;
- A unified contract for all civil work, limiting the contracts to either £25,000 or £50,000;
- BVT for all civil contracts: suppliers to bid against published criteria (including quality).
He acknowledged that some organisations would have to merge, or to discontinue legal aid work as the market consolidated.
Fixing Costs (2007)
In preparation for the introduction of BVT the LSC introduced a system of fixed fees for all civil and criminal legal aid work. Previously most nfp suppliers had received a fixed payment for a block of work, whereas private providers were paid by the case. Transitional arrangements were put in place for nfp suppliers.
The first stage consisted in introducing the unified contracts and then the fixed fees. Fixed fees represented a 9% reduction in pay for police station work, and a 16% reduction in pay or magistrates’ court work. As is described below, 95% of private practice firms eventually signed the new criminal legal aid contract which came into effect in January 2008.
The final years of the Labour Government (2007-2010)
The remaining years of the Labour Government saw continuing tensions between the Ministry of Justice (MoJ)/LSC on the one hand and the two sides of the legal profession on the other, and also between the MoJ and the LSC which both possessed policy-forming roles at a time when under continuing Treasury pressure continuous efforts had to be made to find new ways of controlling total legal aid expenditure within the permitted limit. 30 consultation papers were issued between 2006 and 2010, and this fact alone gives an indication of which shows the number of different initiatives that were being pursued.
Civil legal aid contracts
On the civil side, a compromise was reached with the Law Society in November 2007 following its successful litigation about the lawfulness of the new civil legal aid contracts. Under this agreement there would be no price competitive tendering until 2013 at the earliest, and there would be some small increase in the rates paid in cases. (As part of this agreement, the introduction of BVT was delayed until 2009). No new CLACs or CLANs would be created before 2010 other than those already listed for consideration and consultation.
In 2009 the LSC sought to introduce redesigned civil legal aid contracts. These contained requirements that successful tenderers for the new social welfare law contracts should be able to provide services in housing, benefits and debt work, while bidders for new family law contracts were to be given preference if they were members of two specialist panels (for children and domestic abuse). The tendering arrangements caused consternation among firms who currently held family law contracts. The number of family law contracts was reduced by 46% in this tendering round, with good firms losing out altogether and new, untried firms getting all the cases for which they had bid. Here, too, the Law Society brought things to a halt when in September 2010 the High Court ruled in their favour that the legal profession had been given insufficient notice of the new selection criteria.
Civil legal help
So far as civil legal help was concerned, in A Study of Legal Advice at Local Level, published in June 2009, Lord Bach (the minister responsible for legal aid) wrote in a Foreword:
“At any time, but particularly now in difficult economic times, the provision of social welfare law is of prime importance. Legal advice, in the fields of housing, debt and welfare benefits, can solve people’s legal problems, with the result that their lives and the lives of their families can be improved.
I am proud that we have increased the level of legal aid spend in this field over the last few years. In resource terms, spending on civil legal aid (excluding immigration) has increased by 30% since 04-05 (from £608m to £791m in 08-09). I am delighted that a further £13 million extra money was put in 08-09 to increase debt advice, that the free legal and housing duty solicitor scheme was expanded to cover 112 county courts across England and Wales and that the number of calls to the Community Legal Advice phone service shot up to more than 500,000 a year. I was particularly pleased to raise the eligibility level for civil legal aid by 5%, increasing the number of clients who can be helped by a potential £750,000.”
Criminal legal aid contracts
On the criminal side, the Law Society’s success in judicial review proceedings over the introduction of fixed fees for criminal legal aid work led to the LSC deciding to give notice of termination of the existing criminal contracts and to put them through a new tendering process, with the new contracts commencing in January 2008. Although some well-known firms dropped out, and it was calculated that the introduction of the new fixed fees would mean a 9% reduction in pay for police station work and a 16% reduction in fees for magistrates’ court work, in the event 95% of the private practice firms and every law centre signed the new contracts.
So far as Crown Court cases were concerned, the LSC’s plans were frustrated when only 130 of the advocates who had joined a new specialist criminal panel were willing to agree the new contracts on offer in March 2008. A compromise was then negotiated. There would be an increase of 5% in fees for VHCC cases at a cost of £6 million up to July 2009. This would be paid for by reducing the number of cases in which two counsel could be instructed. There would then be a revised payment scheme based on graduated fees.
During 2008 the LSC embarked on an effort to introduce BVT into police station and magistrates’ court work, while at the same time disavowing any ambition to achieve any savings through this move. This, too, was abandoned the following year, although a pilot scheme in two areas lived on, only to be wound up shortly before the General Election.
The National Audit Office Report and the Magee Review
Throughout this start-stop saga the LSC succeeded in operating within the Treasury-imposed cap by introducing new means tests in criminal cases or cutting criminal legal aid fees. They also sought to limit to legal aid rates the amount of costs an acquitted defendant could recover from central funds, but the relevant regulations were struck down by the High Court in June 2010, and it was left to a new government to reintroduce them on a lawful basis.
The LSC came under criticism in a National Audit Office (NAO) Report in October 2009 when it was found that just under £25 million had been paid out in solicitors’ fees to which they were not entitled (in the following accounting year the equivalent figure was £76.5 million).
It was against this background, coupled with some uneasy relationships between the LSC and MoJ officials (bolstered by a concern that the Government was seeking to interfere on political grounds with the LSC’s discretion in individual cases), that a former Head of HM Courts Service, Sir Ian Magee, was invited to undertake a review of the operation of the LSC and of its budget. In his report, published in March 2010, Sir Ian recommended that responsibility for the formulation of legal aid policy should be vested in MoJ alone, and he also found serious weaknesses in the LSC’s forecasting and other financial management systems. The Government announced that it would abolish the LSC and transfer the administration of legal aid to a new executive agency of MoJ. Carolyn Regan, the LSC’s chief executive, resigned on the spot.
The Labour Government’s final action, announced shortly before the General Election, was to cut fees in Crown Court cases by 4.5%, with a further cut of 13.5% scheduled to follow two years later.
 Including immigration proceedings.
 Research on cost drivers in criminal defence work showed that decisions taken beyond the remit and direct influence of the LSC and defence lawyers had a significant impact on criminal legal aid expenditure and accounted for a significant proportion of the increase in expenditure over the previous decade. These factors included the greater use of imprisonment and the fact that the number of arrests was creeping up. See Ed Cape and Richard Moorhead, Demand induced supply? Identifying cost drivers in criminal defence work. A report to the Legal Services Commission (LSRC 2007).
 Clare Dodgson was away on long-term sick leave for her last 12 months at the Commission.
 The statistics in the last two paragraphs are taken from the Legal Services Commission’s Annual Report and Accounts, 2009-10.
 Community Legal Advice Centres and Community Legal Advice Networks.
 DCA, A Fairer Deal for Legal Aid (Cm 659, 2005).
 There were three principal and distinct problem clusters: Family (domestic violence, divorce, relationship and family problems); Homelessness (rented housing, homelessness, benefits); and Economic (money and debt, consumer employment problems).
 Pascoe Pleasance et al: Causes of action, civil law and social justice. The final report of the first LSRC survey of justiciable problems, LSC 2004.
 LSC, Making Legal Rights a Reality (2006).
 And in Wales the Welsh Assembly Government.
 For a description of the problems faced by joint commissioning by two funding bodies with different aims, see Closing the Justice Gap (ed Jon Robins, 2010) pp 36-7.
 A MoJ study in 2009 found that the first five CLACs then in existence were managing adequately, but had been costly and time-consuming to set up. (Legal Advice and the Local Level, MoJ, 2009).
 CLACs at Barking & Dagenham, Cardiff, Manchester, Stockport, Sunderland and Wakefield; and CLANS in the East Riding of Yorkshire, Gloucestershire and West Sussex.
 Professor Richard Moorhead, Process Evaluation of CLACs and CLANs, 2010. This study contains a very full exposition of the reasons why the experiment failed.
 LSC, Improving Value for Money for Publicly Funded Criminal Defence Services in London (2005)
 One solicitor said that the fact that his firm was peer reviewed and placed in the top three firms nationally would count for little against being undercut “by a bloke with a mobile phone working out of the front room”.
 LSC, Quality Relationships Delivering Quality Outcomes (2006).
 LSC, Independent Peer Review of Legal Advice and Legal Work (2005).
 LSC, Independent Peer Review? The Process (2005).
 See The Justice Gap (Steve Hynes and Jon Robins, 2009), p 52 for a blistering attack on the abandonment of the preferred supplier arrangements by the LSC Commissioner responsible for the crime portfolio at that time.
 Lord Carter: Procurement of Criminal Defence Services: market-based reform (February 2006)
 Lord Carter: Review of legal aid procurement (July 2006).
 The Ministry of Justice was created in May 2007. It took over responsibility for legal aid policy from the Department of Constitutional Affairs, which was abolished.
 R (Law Society) v Legal Services Commission  EWHC 1848 (Admin);  EWCA Civ 1264.
 R (Law Society) v Legal Services Commission  EWHC 2550 (Admin). Moses LJ described the prevailing anxieties in these terms: “The reduction caused serious and vociferous concern. It was not just a question of numbers. It was not merely a question of dismay that those who had spent their professional lives for little reward providing publicly funded services to the deprived, socially disadvantaged and excluded were no longer to be permitted to do so. The focus of concern was that those who were acknowledged to be highly skilled and experienced professionals were no longer going to be able to deploy those skills in areas where they were most needed. That concern was expressed not merely by those who had failed, but by those who had succeeded, and by those who had come to know, trust and rely upon solicitors practising in a difficult and demanding jurisdiction, namely clients, minority representative organisations and judges.”
 The expression “civil legal aid” includes legal aid for family law cases.
 R (Law Society) v Legal Services Commission [2010) EWHC 1406 (Admin). The history of this saga is described in a Parliamentary briefing: see http://researchbriefings.files.parliament.uk/documents/SN05213/SN05213.pdf
 A survey conducted by the NAO at this time revealed tensions in the relationship between the legal profession and the LSC. 36% of the solicitor respondents perceived the LSC as “unhelpful” and 29% believed the LSC did not fully understand the legal system.